Gujarat High Court
Indian Wind Energy Association vs Gujarat Urja Vikas Nigam Limited ... on 14 November, 2017
Equivalent citations: AIR 2018 GUJARAT 42
Bench: R.Subhash Reddy, Vipul M. Pancholi
C/LPA/1914/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 1914 of 2017
In SPECIAL CIVIL APPLICATION NO. 19312 of 2017
With
CIVIL APPLICATION NO. 14244 of 2017
In
LETTERS PATENT APPEAL NO. 1914 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
=========================================
1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as Yes
to the interpretation of the Constitution of India or any
order made thereunder ?
=============================================
INDIAN WIND ENERGY ASSOCIATION....Appellant(s)
Versus
GUJARAT URJA VIKAS NIGAM LIMITED (GUVNL) & 3....Respondent(s)
=============================================
Appearance:
MR MIHIR THAKORE, SR. ADVOCATE WITH MR AMIT K DAVE, ADVOCATE for
the Appellant(s) No. 1
MR KT DAVE, ADVOCATE for the Appellant(s) No. 1
MR KAMAL TRIVEDI, SR. ADVOCATE WITH MR PREMAL R JOSHI, CAVEATOR
for the Respondent(s) No. 1
=============================================
CORAM: HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY
and
HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI
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Date : 14/11/2017
ORAL JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE MR. R.SUBHASH REDDY) [1] This appeal, under clause 15 of the Letters Patent, is filed by the appellant herein original petitioner in Special Civil Application No.19312 of 2017, which was filed under Article 226 and 227 of the Constitution of India, aggrieved by the order of the learned Single Judge dated 0306/11/2017. By the aforesaid order, the learned Single Judge dismissed the petition filed by the appellant herein - original petitioner. [2] Above petition was filed with the prayers, which read as under : 7(A) This Hon'ble Court may be pleased to admit and allow this petition.
(B) This Hon'ble Court may be pleased to issue writ of certiorari or any other appropriate writ to quash and set aside the entire competitive bidding process that has come to be initiated by the respondents, in particular by the respondent No.1, as well as the impugned order dated 6/10/2017 at "AnnexureA" passed by the respondent No.2, approving the bidding process. (C) Pending admission, hearing and final disposal of this petition, this Hon'ble Court may be pleased to stay the operation, implementation and execution of order of the Gujarat Electricity Regulatory Commission, dated 06/10/2017 as well as the competitive bidding process initiated by the respondent no.1. (D) To pass such other and further orders necessary in the interest of justice."
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[3] The appellant herein is a Association representing the interest
of stakeholders in the wind energy sector across various States of India. In the petition, the petitioner has questioned the action of respondent no.1 in imitating competitive bidding process in exercise of powers conferred under Section 63 of the Electricity Act, 2003 and also it has questioned the order dated 06.10.2017 passed by the Gujarat Electricity Regulatory Commission. By the aforesaid order dated 06.10.2017, 3rd respondent Commission granted approval to the bidding process undertaken by the 1st respondent for the purpose of fixation of tariff.
[4] Before we proceed further, we deem it appropriate to refer in brief, object and reasons of the Electricity Act, 2003 and the relevant provisions of the said Act, which are necessary for the disposal of this appeal.
[4.1] The Electricity Act, 2003 is central piece of legislation, which is enacted with a object to promote competition in electricity industry, and to protect the interest of the consumers, as also to provide an independent and transparent regulatory mechanism by creating regulatory commission. The aspect of electricity power generation, transmission and distribution was undertaken by the erstwhile Gujarat Electricity Board. After enforcement of provisions under Electricity Act, 2003, activities of generation, transmission, distribution, bulk power purchase and supply undertaken by the erstwhile Gujarat Electricity Board have been assigned to Page 3 of 23 HC-NIC Page 3 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT seven separate functional entities. Function of bulk purchase and bulk sale of power is conferred on 1st respondent - Gujarat Urja Vikas Nigam Limited (GUVNL). Under the scheme of the said Act, distribution companies have to procure power from Renewable Energy Sources as per the provisions contained under Section 81(1)(e) of the Electricity Act and also in terms of Gujarat Electricity Regulatory Commission GERC (Procurement of Energy from Renewable Energy Sources) Regulations, 2010 which are amended from time to time.
[4.2] Part VII of the Electricity Act, 2003 deals with tariff regulations, determination of tariff, determination of tariff by bidding process, procedure for tariff order etc. Section 61,62 and 63 of the said Act reads as under : "61. Tariff regulation The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely :
(a) the principles and methodologies specified by the Central Commission for determination of the tariff applicable to generating companies and transmission licensees;
(b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles;
(c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments;
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(d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner;
(e) the principles rewarding efficiency in performance;
(f) multiyear tariff principles;
(g) that the tariff progressively reflects the cost of supply of electricity and also reduces crosssubsidies in the manner specified by the Appropriate Commission;
(h) the promotion of cogeneration and generation of electricity from renewable sources of energy;
(i) the National Electricity Policy and tariff policy :
Provided that the terms and conditions for determination of tariff under the Electricity (Supply) Act, 1948, the Electricity Regulatory Commission Act, 1998 and the enactments specified in the Schedule as they stood immediately before the appointed date, shall continue to apply for a period of one year or until the terms and conditions for tariff are specified under this section, whichever is earlier.
62. Determination of tariff (1) The Appropriate Commission shall determine the tariff in accordance with the provisions of this Act for
(a) supply of electricity by a generating company to a distribution licensee :
Provided that the Appropriate Commission may, in case of shortage of supply of electricity, fix the minimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance of an agreement, entered into between a generating company and a licensee or between licensees, for a period not exceeding one year to ensure reasonable prices of electricity;
(b) transmission of electricity;
(c) wheeling of electricity;Page 5 of 23
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(d) retail sale of electricity :
Provided that in case of distribution of electricity in the same area by two or more distribution licensees, the Appropriate Commission may, for promoting competition among distribution licensees, fix only maximum ceiling of tariff for retail sale of electricity.
(2) The Appropriate Commission may require a licensee or a generating company to furnish separate details, as may be specified in respect of generation, transmission and distribution for determination of tariff.
(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.
(4) No tariff or part of any tariff may ordinarily be amended, more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified. (5) The Commission may require a licensee or a generating company to comply with such procedure as may be specified for calculating the expected revenues from the tariff and charges which he or it is permitted to recover.
(6) If any licensee or a generating company recovers a price or charge exceeding the tariff determined under this section, the excess amount shall be recoverable by the person who has paid such price or charge along with interest equivalent to the bank rate without prejudice to any other liability incurred by the Page 6 of 23 HC-NIC Page 6 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT licensee.
63. Determination of tariff by bidding process Notwithstanding anything contained in section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government."
[4.3] Regulatory Commissions are constituted under part X of the Electricity Act. Section 76 to 109 of the Electricity Act, 2003 deals with provisions relating to constitution, qualification for appointment of members of Central Commission, qualification for appointment of Chairperson and members of State Commission and functions of the State Commission etc. [4.4] Section 86 of the Act enumerates functions of the State Commission. Under Section 86(1), the State Government is empowered to determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be within the State. Under provisio to Section 86(1)(a), where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers.
Page 7 of 23 HC-NIC Page 7 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT [4.5] Under section 86(1)(b), the State Commission is empowered
to regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;
[4.6] Under section 3 of the Electricity Act, Central Government is empowered from time to time, prepare the national electricity policy and tariff policy in consultation with the State Government and the Authority for development of power system based on optimal utilization of resources such as coal, natural gas, nuclear substance or materials, hydro and renewable sources of energy. Central Government is also empowered to publish the national electricity policy and tariff policy from time to time. [5] Ministry of Power, Union of India has notified tariff policy by resolution dated 28.01.2016. Clause 6.4 of the policy deals with the provisions relating to renewable sources of energy generation including co generation from renewable energy sources. Clause 6.4.2 of the policy reads as under : "(2) States shall endeavour to procure power from renewable energy source through competitive bidding to keep the tariff low, except from the waste to energy plants. Procurement of power by Distribution Licensee from renewable sources from projects above the notified capacity, shall be done through competitive bidding Page 8 of 23 HC-NIC Page 8 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT process, from the date to be notified by the Central Government. However, till such notification, any such procurement of power from renewable energy sources projects, may be done under section 62 of the Electricity Act, 2003. While determining the tariff from such sources, the Appropriate Commission shall take into account the solar radiation and wind intensity which may differ from area to area to ensure that the benefits are passed on the consumers."
[6] Vide order No.2 of 2016, Gujarat Electricity Regulatory Commission, Gandhinagar has passed order in the matter of determination of tariff for procurement of power by the distribution licensees and others from wind power projects in exercise of powers conferred under Section 62(1)(a) of the Electricity Act, 2003. The State Commission's decision so far as renewable energy to the extent relevant, for the purpose of this appeal reads as under : "The Commission has observed that, as per the provisions of the Tariff policy, procurement from renewable energy projects by distribution licensees is recommended through competitive bidding to keep the tariff low. However, such procurement has to be done through competitive bidding from the date of such notification by the Central Government.
In view of above, the Commission decides that the distribution licensees may procure electricity from the wind power projects at the tariff determined by the commission under Section 62 of the Act under this order or may carry out competitive bidding for procurement of electricity from wind power projects through Page 9 of 23 HC-NIC Page 9 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT transparent process of bidding under section 63 of the Act. The distribution licensees may approach the Commission for adoption of the tariff discovered through competitive bidding process. In such cases, the tariff determined by the Commission in this order will act as a ceiling tariff."
By the aforesaid order, the Commission has determined wind power tariff at Rs.4.19 per kWh.
[7] 1st respondent Company on behalf of its four subsidiary distribution companies initiated the process by publishing the notice inviting tenders for procurement of 500 MW grid connected with the power from wind projects through competitive bidding process on 15.06.2017, under the intimation to the 3rd respondent vide letter dated 16.07.2017 for the purpose of fixation of tariff under Section 63 of the Act. Tender documents were also published on website. Last date for bid submission was 10.07.2017. Technical bid opening of the tenders was on 11.07.2017 and the financial bid opening was on 17.07.2017. It appears that based on the request made by the various prospective bidders, during prebidding meeting, 1st respondent has extended the bid deadline from time to time. In the meantime, letter dated 20.07.2017 was also addressed by the 3rd respondent Commission and referring to the provisions under Section 63 read with Section 86(1)(b) of the Act, advised 1st respondent to get proper regulatory approval from the Commission by filing the petition GERC (Conduct of Business Regulations), 2004. In view of said letter of the Page 10 of 23 HC-NIC Page 10 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT Commission, 1st respondent has filed the petition being No. 1682 of 2017 before the 3rd respondent Commission under Section 63 read with Section 86(1)(b) of the Act seeking approval of the competitive bidding process initiated by it. 3rd respondent - Commission after considering National Tariff Policy, draft guidelines issued by the Central Government, granted approval vide proceeding dated 06.10.2017 for the competitive bidding process undertaken by 1st respondent for fixation of tariff under Section 63 of the Act.
[8] Initiation of competitive bidding process for fixation of tariff under Section 63 of the Act and approval vide order dated 06.10.2017 passed by the 3rd respondent was challenged in the petition by the appellant herein mainly on the ground that in absence of final guidelines issued by the Central Government under Section 63 of the Act, no bidding process could be initiated for the purpose of fixation of tariff under section 63 of the Act. It is also the case of the appellant herein that such bidding process initiated is contrary to the policy notified by the Ministry of Power, Union of India in exercise of powers under Section 3 of the Act. [9] Learned Single Judge rejected the contention of the appellant and held that in view of the existing draft guidelines issued by the Central Government, the respondents are empowered to initiate competitive bidding process for fixation of tariff, which is approved by the 3rd respondent - Commission vide order dated 06.10.2017. It is held by the Page 11 of 23 HC-NIC Page 11 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT learned Single Judge that such steps taken by the respondent authorities are in conformity with the objects of the Act and 3rd respondent acted within the power conferred under Section 86 of the Act. [10] Heard learned Senior Counsel Mr. Mihir Thakore for the appellant and Mr. Kamal Trivedi, learned Senior Counsel appearing for respondent no.1 and 2 at the stage of admission.
[11] Mr. Thakore, learned Senior Counsel appearing for the appellant by referring to the order under challenge passed by the learned Single Judge and other materials placed on record submitted that in absence of guidelines issued by the Central Government, there is no power upon respondent no.1,2 and 3 for determination of tariff by bidding process. Such action on the part of the respondents is contrary to the policy notified by the Central Government. It is submitted that in absence of final guidelines by the Central Government, respondent No.1 could not have initiated nor respondent No.3 - Commission could have approved bidding process initiated by respondent No.1 under Section 63 of the Act. It is submitted that in absence of any notification and directions issued in the policy by the Central Government, procurement of power from renewable energy source projects has to be done under section 62 of the Act. In support of his argument, reliance is placed on the following judgments, which were also relied before the learned Single Judge.
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[1] In the case of Energy Watchdog, Prayas (Energy
Group), Punjab State Power Corporation Limited v/s. Central Electricity Regulatory Commission and Ors. Reported in 2017 (4) Scale 580.
[2] Judgment of the Hon'ble Supreme Court in the case of Gujarat Urja Vikas Nigam Limited v/s. Solar Semiconductor Power Co. (I) Pvt. Limited and Ors. dated 25.10.2017 in Civil Appeal No.6399 of 2016.
[12] On the other hand, it is submitted by Mr.Kamal Trivedi, learned Senior Counsel appearing for respondent Nos.1 and 2 that there are already draft guidelines issued by the Central Government and in view of the same, 3rd respondent - Commission while passing the order considered the plea of the appellant Association and rejected the same by recording valid reasons. It is submitted that draft guidelines issued by Central Government itself recognized that in case of ongoing bidding process, if the bids have already been submitted by the bidder prior to the notification of the guidelines and /or SBDs and if there are any deviations between the guidelines and/or the SBDs and the RfS, PPA, PSA, the Rfs, PPA and the PSA shall prevail.
[12.1] Further, it is brought to our notice that similar order is passed on 10.07.2017 by the Tamil Nadu Electricity Regulatory Commission and the appellant Association has questioned the same by way of Writ Petition No.15205 of 2017 before the High Court of Madras, which was ultimately Page 13 of 23 HC-NIC Page 13 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT dismissed as withdrawn. Further by taking us to the order No.2 of 2016 passed by the 3rd respondent, it is submitted that fixation of tariff at Rs.4.19 per kWh is only ceiling tariff and the Commission itself has decided that such procurement of power has to be done through competitive bidding process as required under section 63 of the Act. It is submitted that process initiated is in the interest of consumers, which is the main object of Electricity Act, 2003 and bidding process undertaken by the 1st respondent and approved by the 3rd respondent is in conformity with the Electricity Act, 2003. It is submitted that the findings recorded by the learned Single Judge are in conformity with the law on the subject, and both the judgments relied by the appellant will not render any assistance in support of their case. Learned Senior Counsel referred to certain observations of the very same judgments in support of his arguments.
[13] Having heard learned Counsel for the appellant, we have perused the detailed order passed by the learned Single Judge and other material placed on record. The Electricity Act, 2003 is enacted to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas etc. It is true that under Section 3 of the Act, Central Government is empowered to notify National Electricity Policy and Tariff Policy in consultation with the State Government and section 62 and 63 of the Act deals with the Page 14 of 23 HC-NIC Page 14 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT determination of tariff. Under Section 62 of the Act, Commission is empowered to determine tariff in accordance with the provisions of the Act and under Section 63 of the Act, Commission is empowered to adopt the tariff, if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government. Power conferred under the Section 63, is notwithstanding anything contained in section 62 of the Act.
[14] It is not in dispute that there are draft guidelines issued by the Ministry of Power. Before undertaking bidding process for determination of tariff under Section 63 of the Act, order No.2 of 2016 is passed by the Gujarat Electricity Regulatory Commission. In the order itself, while determining tariff at Rs.4.19 kWh, the Commission has observed that as per the provisions of the Tariff policy, procurement from renewable energy projects by distribution licensees is recommended through competitive bidding to keep the tariff low and it is specifically observed in the said order that it is open for the distribution licensees to approach the Commission for adoption of the tariff discovered through competitive bidding process. It is also observed that in such cases, tariff determined by the Commission in the order No.2 of 2016 will act as a ceiling tariff. [15] Learned Senior Counsel Mr. Thakore referred to tariff policy dated 28.01.2016 and has mainly relied on clause 6.4 of the policy, which relates to renewable source of energy generation including cogeneration Page 15 of 23 HC-NIC Page 15 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT from renewable energy sources. It is contended that as per the said policy, State shall endevour to procure power from renewable energy sources through competitive bidding to keep the tariff low and same has to be done from the date to be notified by the Central Government. It is further submitted that till such notification is notified, the procurement of power from renewable energy source projects has to be done under Section 62 of the said Act. Section 63 of the Act, which empowers determination of tariff by bidding process notwithstanding anything contained under section 62 of the Act, does not speak of any provisional or final guidelines issued by the Central Government. It is not in dispute that there are provisional guidelines / Standard Bidding Documents issued by the Central Government, which are in force.
[16] Draft guidelines issued by the Ministry of New and Renewable Energy itself recognizes that in case of ongoing bidding process, if the bids have already been submitted by bidders prior to the notification of the Guidelines and/or SBDs, and if there are any deviations between the Guidelines and/or the SBDs and the proposed RfS, PPA, PSA (if applicable), the RfS, PPA and the PSA shall prevail. In view of such guidelines, it cannot be said that 1st respondent cannot undertake competitive bidding process for determination of tariff in exercise of powers under Section 63 of the Act, more particularly in absence of any provisional or final guidelines. If at all any final guidelines are not issued, provisional guidelines can be acted upon. Policy framed under Section 3 of the Act is general policy by the Page 16 of 23 HC-NIC Page 16 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT Central Government and in view of availability of draft guidelines issued by the Ministry of New and Renewable Energy, it cannot be said that no bidding process could be undertaken by the 1st respondent. Such process undertaken is in the interest of consumers and even tariff order passed by 3rd respondent Commission in Order No.2 of 2016 also clearly recommends for taking steps for competitive bidding process by the licensees as contemplated under Section 63 of the Act. In view of draft guidelines, powers conferred under Section 63 and the functions of the Commission as contemplated under Section 86 of the Act, it cannot be said that such process undertaken by the 1st respondent is without any authority of law. [17] Ministry of New and Renewable Energy has issued the draft guidelines for procurement of wind power. Relevant para 5.1 under the head "Preparation for inviting bid and project preparedness" reads as under : "5. PREPARATION FOR INVITING BID AND PROJECT PREPAREDNESS The Procurer shall meet the following conditions:
5.1. Bid Documentation:
a) Prepare the bid documents in accordance with these Guidelines and Standard Bidding Documents (SBDs) [consisting of Model Request for Selection (RfS) Document, Model Power Purchase Agreement (PPA) and Model Power Sale Agreement (PSA)], notified by the Central Government, except as provided in sub clause (c) below.
b) Inform the Appropriate Commission about the initiation of Page 17 of 23 HC-NIC Page 17 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT the bidding process.
c) Seek approval of the Appropriate Commission for deviations, if any, in the draft RfS draft PPA, draft PSA (if applicable) from these Guidelines and/ or SBDs, in accordance with the process described in Clause 18 of these Draft for Discussion Guidelines.
i. However, till the time the SBDs are notified by the Central Government, for purpose of clarity, if the Procurer while preparing the draft RfS, draft PPA, draft PSA and other Project agreements provides detailed provisions that are consistent with the Guidelines, such detailing will not be considered as deviations from these Guidelines even though such details are not provided in the Guidelines. ii. Further, in case of an ongoing bidding process, if the bids have already been submitted by bidders prior to the notification of these Guidelines and/or SBDs, then if there are any deviations between these Guidelines and/or the SBDs and the proposed RfS, PPA, PSA (if applicable), the RfS, PPA and the PSA shall prevail.
d) In case of intermediary procurer, clearance from distribution licensee(s) on the draft RfS, PPA and PSA having details specific to the proposed procurement."
[18] Learned Counsel for the appellant has placed reliance on the case of Energy Watchdog (supra). In the said case, the Adani Power, after entering into the power purchase agreement and supplementary power purchase agreement in the year 2007 with GUVNL in the State of Gujarat and Haryana Utilities in the State of Haryana for the supply of power from the power project at Mundra Power Project, Gujarat, under Section 63 of the Act, had filed the petition before the Central Electricity Regulatory Page 18 of 23 HC-NIC Page 18 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT Commission under Section 79 of the Act, seeking redressal on the ground of Force Majeur and/or change in law in Indonesia and the appellate Tribunal has passed the order remanding the matter to the Commission by holding that the generation and the sale of power by Adani Power to GUVNL and the Haryana Utilities was the composite claim within the meaning of Section 79(1)(b) of the said Act. Said order came to be challenged before the Hon'ble Supreme Court. While interpreting provisions of section 63 of the Act, the Hon'ble Supreme Court held in para 18 and 19 as under : "18. The construction of Section 63, when read with the other provisions of this Act, is what comes up for decision in the present appeals. It may be noticed that Section 63 begins with a nonobstante clause, but it is a nonobstante clause covering only Section 62. Secondly, unlike Section 62 read with Sections 61 and 64, the appropriate Commission does not "determine" tariff but only "adopts" tariff already determined under Section 63. Thirdly, such "adoption" is only if such tariff has been determined through a transparent process of bidding, and, fourthly, this transparent process of bidding must be in accordance with the guidelines issued by the Central Government. What has been argued before us is that Section 63 is a stand alone provision and has to be construed on its own terms, and that, therefore, in the case of transparent bidding nothing can be looked at except the bid itself which must accord with guidelines issued by the Central Government. One thing is immediately clear, that the appropriate Commission does not act as a mere post office under Section 63. It must adopt the tariff which has been determined through a transparent process of Page 19 of 23 HC-NIC Page 19 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT bidding, but this can only be done in accordance with the guidelines issued by the Central Government. Guidelines have been issued under this Section on 19th January, 2005, which guidelines have been amended from time to time. Clause 4, in particular, deals with tariff and the appropriate Commission certainly has the jurisdiction to look into whether the tariff determined through the process of bidding accords with clause 4.
19. It is important to note that the regulatory powers of the Central Commission, so far as tariff is concerned, are specifically mentioned in Section 79(1). This regulatory power is a general one, and it is very difficult to state that when the Commission adopts tariff under Section 63, it functions dehors its general regulatory power under Section 79(1)(b). For one thing, such regulation takes place under the Central Government's guidelines. For another, in a situation where there are no guidelines or in a situation which is not covered by the guidelines, can it be said that the Commission's power to "regulate" tariff is completely done away with? According to us, this is not a correct way of reading the aforesaid statutory provisions. The first rule of statutory interpretation is that the statute must be read as a whole. As a concomitant of that rule, it is also clear that all the discordant notes struck by the various Sections must be harmonized. Considering the fact that the nonobstante clause advisedly restricts itself to Section 62, we see no good reason to put Section 79 out of the way altogether. The reason why Section 62 alone has been put out of the way is that determination of tariff can take place in one of two ways - either under Section 62, where the Commission itself determines the tariff in accordance with the provisions of the Act, (after laying Page 20 of 23 HC-NIC Page 20 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT down the terms and conditions for determination of tariff mentioned in Section 61) or under Section 63 where the Commission adopts tariff that is already determined by a transparent process of bidding. In either case, the general regulatory power of the Commission under Section 79(1)(b) is the source of the power to regulate, which includes the power to determine or adopt tariff. In fact, Sections 62 and 63 deal with "determination" of tariff, which is part of "regulating" tariff. Whereas "determining" tariff for interState transmission of electricity is dealt with by Section 79(1)(d), Section 79(1)(b) is a wider source of power to "regulate" tariff. It is clear that in a situation where the guidelines issued by the Central Government under Section 63 cover the situation, the Central Commission is bound by those guidelines and must exercise its regulatory functions, albeit under Section 79(1)(b), only in accordance with those guidelines. As has been stated above, it is only in a situation where there are no guidelines framed at all or where the guidelines do not deal with a given situation that the Commission's general regulatory powers under Section 79(1)(b) can then be used."
[19] In the case of Gujarat Urja Vikas Nigam Limited (supra), the Hon'ble Supreme Court has considered the issue whether the Commission had the inherent powers to extend the control period and held that Commission being a creature of statute cannot assume to itself any powers, which are not otherwise conferred on it. The Hon'ble Supreme Court has held in para 35 as under : "35. This Court should be specially careful in dealing with matters of Page 21 of 23 HC-NIC Page 21 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT exercise of inherent powers when the interest of consumers is at stake. The interest of consumers, as an objective, can be clearly ascertained from the Act. The Preamble of the Act mentions "protecting interest of consumers" and Section 61(d) requires that the interests of the consumers are to be safeguarded when the Appropriate Commission specifies the terms and conditions for determination of tariff. Under Section 64 read with Section 62, determination of tariff is to be made only after considering all suggestions and objections received from the public. Hence, the generic tariff once determined under the statute with notice to the public can be amended only by following the same procedure. Therefore, the approach of this Court ought to be cautious and guarded when the decision has its bearing on the consumers."
[20] We have carefully considered the plea of the appellant with reference to the view taken by the Hon'ble Supreme Court in the aforesaid judgments. We are of the considered view that both the judgments relied by the appellant would not render any assistance to the appellant. [21] As power is exercised by the State Commission under Section 86 of the Act while passing impugned order dated 06.10.2017, we are of the view no error is committed by the State Commission, in as much as it is clearly held by the Hon'ble Supreme Court in the case of Energy Watchdog (supra) that where there are no guidelines framed at all or where the guidelines do not deal with a given situation, the Commission's power is not curtailed. Same view is to be applied in the present case, more so when Page 22 of 23 HC-NIC Page 22 of 23 Created On Tue Nov 14 22:56:33 IST 2017 C/LPA/1914/2017 JUDGMENT draft guidelines are covering the field.
[22] For the aforesaid reasons and having regard to reasons recorded by the learned Single Judge, we are of the view that no error is committed by the learned Single Judge so as to interfere with the same in this appeal under clause 15 of the Letters Patent. [23] Letters Patent Appeal is devoid of merits and accordingly, it is dismissed at the stage of admission. Consequently, the Civil Application stands disposed of. Interim relief granted earlier, if any, stands vacated.
(R. SUBHASH REDDY, CJ) (VIPUL M. PANCHOLI, J.) satish Page 23 of 23 HC-NIC Page 23 of 23 Created On Tue Nov 14 22:56:33 IST 2017